The Wall Street Journal is reporting that thanks to customer backlash and likely due to a public relations nightmare, the bank is reversing its policy. It’s a smart move, but is it too late? Bank of America has done a great job burning an imagine in customers’ minds of a bank that is willing to sacrifice its customers — not to recover from a potential loss, but to recover from a lower profit due to regulators’ new rules against excessive interchange fees. Corporations are expected to look for profit under every rock, but this particular type of fee hurts low-income customers much more than high-income customers. You would have been able to avoid the potential fee by having a significant balance of deposits held at the bank, much more than the typical customer might hold.

On Twitter, Michael Kitces from kitces.com said in response to my comment about the fee cancellation, “I think people that BoA didn’t want as customers still got the message loud & clear, even if BoA drops the fee now.” Kyle from Amateur Asset Allocator responded, “Doesn’t affect my attitude one way or another. If I were affected, I’d probably just go to cash-only instead of using the debit card.”

This doesn’t affect plans for Bank Transfer Day. This fee could have been the wake-up call consumers needed to gain the extra motivation to move to a credit union. As we’ve seen with the interchange fee regulation, a window of potential profit closed in one area leads to another window opening somewhere else. Bank of America and the other banks who dropped plans for a debit card fee will find a way to earn their profits, and the next fee may not be nearly as transparent and well-marketed as the debit card fee.

We dropped Wells Fargo and Bank of America as soon as the Dodd-Frank w/ Durbin amendment passed. The reactions of a bank says a lot about how they feel about their customers. Regardless of the backtracking, their attitude is apparent. We bailed them out with TARP funds to save their irresponsible hides, then they come back insult customers with these type of fees. Big banks are ingrates and they deserve to crash in their own pool of irresponsibility.

Fees are a trend in banking and the large banks do not care about individuals. They make all their money from loaning money and fees. The borrowers they care about are businesses. If they can get away with charging checking and debit card fees, they will. The backlash did work this time. Next time it will be more subtle. Perhaps a transaction fee?

There will be more problems. Maybe it isn’t more fees, but instead fewer services, or caps on those services, or worst of all, reduction in staff. People were all up in arms that the big bad banks were charging a fee to the big bad stores (Walmart and 7-11 specifically), but now that they can’t charge that fee, I haven’t seen prices going down at the stores. What we wound up with was the big stores keeping that money without increasing service or decreasing prices, the banks eating that fee (they tried to pass it to the next logical party, and were destroyed in the media for it), and a bunch of people who may or may not improve their situation when they jump on the “We hate Bank X” bandwagon.

Not that I’m defending BofA, but when they get around to firing all the branch level tellers and new accounts reps (the $10-12 an hour worker who is just doing their jobs), I personally blame Durbin and Warren, because this is what they created in an effort to be populist heroes.

1) Banks have had over a year to whine about this. Why is it that retailers don’t even get a month to assess the situation and figure out how best to handle the situation? Retailers unless they are currently working with big banks that have $10+ billion in assets, don’t see any interchange fee reduction.

2) It is silly to blame Durbin and Warren (Buffett?). The banks created a mess with their irresponsible speculation. Since the banks can’t be responsible, we have to bail them out, methods to reduce bank power and redistribute their power to smaller banks is a reasonable solution.

1. You mean like Walmart and 7-11 who deal with Chase, Citi, and BofA? But we’ll see if they reduce their prices over the next year if that will make you feel better. I don’t see it happening.

2. Actually, I’m blaming Elizabeth Warren for proposing policies that would have actual, real, not fooling around negative effects on low and middle income consumers. While the banks sure didn’t make the mess better, a more accurate description for what they did was that they did as much as they could get away with given the hand the government gave them. You want to blame someone for starting the mess? You have to look at the federal government. They put forth rules and programs that the banks used to the very limit of their ability. When you drop a bag of dog food on the floor, and your dog comes in and eats all of it while you are considering the best way to clean it up, do you blame the dog?

Walmart I understand, but why are you even bringing up 7 Eleven. They are #40 as a retailer. All I’m saying is that your criticism is much too soon. If you’re going to be fair about it, you have to give retailers a year to work a plan if they so choose.

I don’t get these executives at firms that make moves they KNOW will be controversial, and then reverse them. This move, the Netflix move, I mean, what the heck are these people thinking? Either they’re too dumb to have predicted the Obvious backlash that would be coming or they’re too dumb to assess how to react. Amazing how these people hold a job.

I’d bet this move was planned well before the Netflix thing happened. We’re finally standing up and being appresive right back. It’s been a long time since Americans have fought back with their wallets. I’m glad we’re trending back to individual strength.

I’m sure I’m in the minority here, but I’m disappointed that Bank of America is dropping the fees. I don’t use my debit card, so the fees they collected were going to help subsidize my checking account. Now Bank of America will be looking for another way to earn money, possibly a monthly maintenance fee that could cost me.

I second this. Move away from BofA, WF, Chase, or anywhere else that would treat customers this way. I also doubt that these fees are subsidizing anything more than Manager X’s new yacht, Paris vacation, or Golden Parachute.

The fact that their fee structure may no longer benefit you in the way it used to is reason to reconsider staying. But that should be done periodically as your needs grow and evolve, not just because of some misguided protest movement.

I now bank with PerkStreet and get 1% cash back on all my purchases. I get 2% back if I keep a $5k minimum. That’s an extremely cool perk and I continue to spend within my means. For those that do not use a debit card, but a credit card — end up risking carrying a balance. That just means you end up paying big powerful banks in other ways. You want to give these banks more money so they can use it to influence our government?

To be frank, if you opened an account with Perkstreet, then you are exactly supporting the bank industry and their lobbyists. Their bank gives you nothing; and you get the same thing that you would normally get with an existing or new credit card. I get 1% cashback with the many credit cards offered today; add the 5% rotating categories quarterly where I always spend money; others with 1.5% cashback; or 5% in everyday purchases; and another gives me 3-2% on gas-groceries purchases. Why give Perkstreet money where you earn nothing, when you can give other banks like Discover, CapitalOne, Ally, and other online and some brick-and-mortar branches for an interest-earning checking or savings account, and use your credit cards?

51% of Americans carry a balance on their credit card. That means anyone using a credit card falls into the trap of owing interest.

I think you missed the whole point about re-distributing bank power and money. We saw deregulation under the influence of powerful financial businesses. The more spread out this power is, the better we are off as a people.

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